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going reform of the whole system of social insurance was being undertaken. A Government Labour Exchange Department for the Reich supervises and regulates the labour market. The Reichsarbeitsblalt (Labour Gazette of the Reich) reports all that goes on in connexion with labour legislation. (E. F.*).

THE FACTORY COUNCILS LAW

The idea of securing representation for workers in the conduct of the establishments in which they work is not new. It was bound to arise from the special character of modern great indus- trial enterprises, in which the majority of the employees have a common interest in their position as regards their employer. The idea of such representation was confronted by obstacles such as a claim of the employer to authority and his determina- tion to be " master in his own house," and, on the other hand, the legal conception that contract alone determined the relations between the two parties, so that the employer had only to do with the individual employee. The instances in which the employer voluntarily recognized the right of his workers as a body were rare; exceptions, such as were made by philanthropic employers like Abbe and Freese, the former at the well-known Karl Zeiss works at Jena, were very rarely imitated. There were extreme- ly few cases before the World War in which a collective wages tariff was set up. It is true that wages-tariff contracts had suc- ceeded in finding a foothold in workshops (Handwerksbetriebe) and industrial establishments of medium size, and that the extension of the principle of collective-wages contracts was being vigorously advocated among the working classes. The great German employers of industry, however, declined to have any dealing with the workmen's organizations. It was for this reason that the method of wages-tariff contracts was comparatively sel- dom the means of establishing representation of workers in the concerns in which they worked. Legislation continued to avoid the subject. It is true that the industrial regulations for the German Empire recognized committees of workers; but these were not obligatory and they had no decisive rights or functions. The one exception was the mining industry. In this instance, after fierce struggles, the introduction of obligatory committees of workers had been secured, particularly in Prussia. The rights of these committees were no doubt extremely limited. Never- theless, an instrument for negotiations had been constructed for the miners, and with it at least opportunity for the regular ex- change of views had been secured.

The war undermined in Germany the old conception of the position of the " masters." The desire to preserve social peace during the war became, as in all countries, a national anxiety. The employers were accordingly urged to conclude wages-tariff contracts. These contracts set up representation of the workers for the separate industrial establishments; a representation which, it is true, was invested with only limited rights. But more than anything else it was the War Emergency Law for securing Aux- iliary Service (Hilfsdienstgesetz), imposing upon all able-bodied men the legal duty to work, which promoted the conception of the establishment by legislation of representative bodies of work- ers. The employee, according to the terms of the Hilfsdienstge- setz, could no longer exchange his employment for another with- out a special certificate (Abkchrschein). There had thus been instituted an obligation to continue to work in a particular estab- lishment, or in other words a legal restriction of liberty for which some counterbalancing advantage had to be secured for the other party. If the employee was chained to the establishment in which he worked, it was only right that he should obtain influence upon the conduct of that establishment. The Hilfsdienstgesetz accordingly set up, in the form of obligatory workers' and sala- ried employees' committees, organs of the employees in each industrial establishment, and these representative bodies had above all the right, in disputes where all the workers were involved, to appeal to the services of a Board of Settlement, thus making the matters in dispute between the employers and em- ployed more or less matters of public interest.

Such was the situation with which the so-called " Councils Movement," following upon the Revolution, was confronted.

There were several tendencies which converged in that move- ment. In the first stage, when in all the larger towns great pla- cards were exhibited bearing the words " All power to the Work- men's and Soldiers' Councils," the Councils Movement appeared to be merely an imitation of what had taken place in Russia. But it was an elemental impulse which drove the masses into the streets. It was an instinctive revolt against the mechanical appa- ratus of the authority in control of industrial establishments. The old authority of the State had collapsed. The idea of liberty seemed to know no bounds. What could appear more natural to the masses, whose powers of endurance had been totally ex- hausted by war and privations, than to demand the control of the establishments in which they worked? This instinctive move- ment, regarded historically, was a relapse into the earliest stages of the development of socialism. Just as the masses had formerly attempted in blind despair to destroy the machines to which they attributed their distress, so now they directed their attacks against the great citadels of the factories, which they regarded as the source of the merciless exploitation of their minds and bodies. If it be further borne in mind that Germany at that time was in the trough of the sea and that there seemed no glimmer of hope that she could again recover in the ordinary way, it will be understood why this movement possessed such a mighty force and why it actually threatened to swallow Germany up. The newly established State was confronted with the task of adopt- ing the legitimate and practical demands of the movement and giving them form and shape. The outcome of this policy is embodied in Art. 165 of the constitution of the Reich, which was framed after great strikes and as the issue of bitter conflicts and prolonged debates at the Congresses of the Councils in Berlin. The text of Art. 165 is as follows:

" Workers and salaried employees are entitled to cooperate on equal terms with the employers in the settlement of the conditions of wages and work, and also in the whole economic development of the processes of production. The organizations of the parties on both sides and their mutual agreements shall be recognized.

" For the furtherance of their social and economic interests workers and salaried employees shall have legal representation by means of Industrial or Factory Workers' Councils (Betriebsarbeiterrate), and also by District Industrial Councils (Bezirksarbeiterrale) distributed according to industrial regions, and by an Industrial Council for the whole Reich (Reichsarbeiteramt).

" With the object of fulfilling the whole of their economic tasks and of cooperating in the execution of the Socialization Laws, the District Workers' Councils and the Workers' Council of the Reich shall meet the representatives of the employers and of any other interested sections of the population through the medium of District Economic Councils and the Economic Council pf the Reich. These District Economic Councils and the Economic 'Council of the Reich shall be so constituted that all the leading industrial occupations are represented in them in accordance with their respective economic and social importance.

" Social or economic bills of fundamental importance shall be laid by the Government before the Economic Council of the Reich for its opinion before being tabled in the Reichstag. The Economic Council of the Reich shall itself have the right to propose the in- troduction of bills of this nature. Should the Government not agree to a bill proposed by the Economic Council, the bill must never- theless be submitted to the Reichstag. The Economic Council of the Reich may have the proposed bill submitted to the Reichstag by a member of the Council.

" Powers of control and administration may be conferred upon the Workers' and the Economic Councils in the spheres assigned to them.

" The development of the Workers' and Economic Councils and the functions to be assigned to them, as well as their relations with other self-administering bodies occupied with questions of social policy, fall exclusively within the province of the Reich."

Article 165 of the constitution of the Reich, containing the general programme for prospective German legislation concern- ing the Councils, is based upon four main principles.

The first principle is the idea of a separate economic constitu- tion within the State, side by side with the political constitution. Within the last 30 or 40 years the powers of the State have been enormously increased; it has been increasingly empowered to intervene in social and, more particularly, in economic matters and to regulate them. In the present generation this tendency will be strengthened, for the idea of " economic freedom " is receding and every kind of economic activity is being subjected